The Fed's three objectives in conducting monetary policy include maximum employment, stable prices, and moderate long-term interest rates.
What is monetary policy?
A nation's overall money supply is managed by monetary policy, which also aims to promote economic growth. Interest rate changes and adjustments to bank reserve requirements are examples of monetary policy strategies. Commonly, monetary policy is categorized as either expansionary or restrictive.
For instance, policymakers use instruments like interest rates, reserves, bonds, etc. to manage the flow of money in order to increase employment, GDP, and price stability.
The Federal Reserve (the Fed), the country's central bank, has been given authority over monetary policy by Congress, but it still has oversight responsibilities for ensuring that the Fed is upholding its statutory mandate of "maximum employment, stable prices, and moderate long-term interest rates."
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